Be honest. This question is often used during graduate recruitment. Your approach to job hunting indicates how you approach challenges. Employers are aware of the competitiveness of the job market. They would be most surprised if you indicated that you have not applied for other jobs and may question your initiative or motivation.

If you are not a student/graduate participating in a university recruitment programmed, you may wish to approach this question more carefully. The interviewer may be looking to ascertain how focused and clearly defined your job objective may be.